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Why That One Concession Probably Won’t Be The End!

Ben Byth
Why That One Concession Probably Won't Be The Last

Now that everyone was on the hook to deliver, something that was previously agreed is no longer agreeable. They were in a very difficult position now that one of the parties in a tripartite deal made a large demand after they had all agreed, and only days before the transaction was to take place and the whole deal was now at risk.


The deal lead went about trying to qualify why things had changed, and whether the demand needed to be met at all. By asking great questions of qualification and curiosity, nearly a third of the demand was dropped!


  1. Help me understand what has changed?
  2. Are you saying that if we can’t agree to this, you won’t be able to transact?


However, they still had some work to do because two thirds of the demand remained and the time pressure was exponentially increasing. They were like many dealmakers who were starting to become very aware of their must-achieve position – protecting the deal they had committed, so they made the decision to simply agree.


Some might think this would be the end of it, but experienced negotiators know all too well that unilateral concessions tend to simply encourage the demand for more! As the clock seemingly sped up towards the deadline, both the quantity and quantum of the demands grew rapidly, almost to the point the deal was suffocated.


If you think about it logically it makes sense. If somebody makes a concession for you because they were under pressure, what are you likely to do next… you aren’t likely to remove the pressure that made them concede, instead you are far more likely to dial it up!


At Scotwork we have a saying that “in negotiations generosity tends to breed greed rather than gratitude”. Any unilateral concessions (concessions made without getting anything in return) generally aren’t met with a “thankyou”, they are met with a demand for more.


Personally, if someone is prepared to make a unilateral concession towards me I’m instantly suspicious that the deal is too good for them! Otherwise how could they afford to make the concession at all?


So, next time you are faced with the dilemma of having to make a concession to protect a deal think about:

  1. Qualifying the demand (people often build a little haggle buffer into their demands)
  2. Trading their demand for a demand of your own


Making someone pay a price to achieve satisfaction of their demand tends to actually slow the demand making, and sometimes the demands simply get dropped. Conceptually it is really easy to negotiate by trading demands, but the reality is that it takes some discipline and it requires having a library of possible counter demands ready in advance.


So, if you are stuck for a counter demand think about either

  • Trading off one main variable for another. For example, if you need to increase the price I will need you to increase the warranty.


  • Trading in a new variable. Anything new late in the deal can’t be critical (critical would already be there), instead new variables introduced later in the deal can be wish lists to sweeten the deal. For example, if they ask you to delay the schedule you could ask for executive representation on the steerco.


Either way, as negotiators we face late demands all the time, and lucky for us the reason is both simple and easily addressed - ‘it worked last time’! Instead of allowing someone to learn bad behaviour, instead negotiators shape the behaviour they seek by qualifying demands and using counter claims to offset and trade their concessions.


Before you get too excited thinking this is a great tactic to try, it isn’t one we advocate for! The problem with this underhanded technique is that it tends not to work more than once because people figure out your run-sheet. I plan on doing countless transactions in my career, so am very strict about not doing anything that could wreck my one and only reputation.


Happy negotiating !

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